×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: experts | bond | rally | over

James Grant, Other Experts: Just Say No to Bonds

By    |   Monday, 31 December 2012 07:42 AM EST

Many investment luminaries have come to agree that the 30-year bond rally is over.

James Grant, editor of Grant’s Interest Rate Observer, is one of them. He has been negative on fixed income for a while.

He sees parallels between now and 1981, when a 35-year bear market for bonds was ending. One parallel is the view of the Federal Reserve.

Editor's Note: The IRS’ Worst Nightmare — How to Pay Zero Taxes

“Central banks are harmless, said the bond bears in 1981; in a social democracy, inflation is ineradicable,” Grant writes in the current issue of his newsletter. “Central bankers are harmless, charge the bond bulls of 2012; in an overleveraged economy, inflation is unachievable.”

Michael Gavin, head of U.S. asset allocation for Barclays, notes that an investor who stayed invested in U.S. or U.K. 10-year government bonds during the past three decades would have earned more than 5 percent a year over inflation.

“It does not require advanced market math to understand that returns like these are no longer remotely plausible,” he wrote in a commentary obtained by The New York Times.

One renowned analyst who doesn’t think bonds have peaked is independent economist Gary Shilling.

He expects a recession next year. "And that means you probably look for more appreciation in long-term Treasury bonds, which have been a favorite of mine since 1981," Shilling tells Yahoo.

He forecasts the 10-year Treasury yield will plunge to 1 percent, in 2013 from 1.72 percent Friday afternoon.

Editor's Note: The IRS’ Worst Nightmare — How to Pay Zero Taxes

© 2024 Newsmax Finance. All rights reserved.


InvestingAnalysis
Many investment luminaries have come to agree that the 30-year bond rally is over.
experts,bond,rally,over
257
2012-42-31
Monday, 31 December 2012 07:42 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved